‘X’, who is in Agra, makes an offer for sale of second-hand luxury car to ‘Y’, who is Jammu, via an e-mail sent on January 15, 2021 at 2:03 pm. However, the e-mail did not reach ‘Y’ due to some technical error at the server which is located in Delhi. Thereafter, ‘X’ makes a mobile phone call to ‘Y’ on January 15, 2021 at 4:04 pm and makes him the same offer as was made in the e-mail. In the same mobile phone call, the offer is absolutely and unconditionally accepted by ‘Y’ at 4:10 pm. In the given situation, where is the contract concluded? (Answer the question after reading the following paragraph.)

Section 4 of the Indian Contract Act, 1872 reads as follows:
Communication when complete – The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
The communication of an acceptance is complete, – as against the proposer, when it is put in a course of transmission to him so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer.
Thus, the provision makes no difference in the position of the offeror. The offeror becomes bound when a properly addressed and adequately stamped letter of acceptance is posted. The acceptor does not become bound by merely posting his acceptance. He becomes bound only when his acceptance comes to the knowledge of the proposer. The contract is concluded at the place from where the proposal is accepted and communication of acceptance is dispatched, i.e., the address at which the proposal was sent. The court at that place would have jurisdiction to entertain a cause of action under the contract. This rule, that the communication of an acceptance is complete as against the proposer when the letter is posted, is probably intended to apply only when the parties are at a distance and they communicate by post. “Where, however, the parties are in each other’s presence or, though separated in space”, they are in direct communication, as, for example, by telephone, no contract will arise until the offeror receives the notification of acceptance.

Option A: Delhi

Option B: Jammu

Option C: Agra

Option D: Neither Delhi, Jammu nor Agra as it is an electronic contract.

Correct Answer

Option: c

Explanation

Chapter I , Section 4 of The Indian Contract Act describes Communication when complete and Section 7 decribes the Acceptance of the contract.

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